Do You Need Credit Card Insurance?
Credit Card Insurance 101
Credit card insurance -- it's offered almost every time you get a new credit card, but is it something you really need? When it comes to credit card insurance, what you don't know can hurt you. Here are some things to keep in mind.
Do You Need Credit Card Insurance?
I'm a big believer in insurance. If you don't pay your credit card balances in full each month and would have a problem making the minimum monthly payments if something happened to your income, then you should probably take out credit card insurance. However, remember that not all credit card insurance is created equal. It's important to understand the different types of insurance and what they mean to you.
The Different Types of Credit Card Insurance
The main goal of all types of credit card insurance is to help you make your credit card payments if, for one of many reasons, you were unable to do so. The most common forms of credit card insurance include credit life, credit property insurance, credit disability and involuntary unemployment.
Credit life insurance is a credit card insurance policy that will pay your credit card balance in full if you were to die. With credit disability insurance, the policy will pay your minimum monthly payment if you have a qualifying disability for a specific period of time. Involuntary unemployment credit card insurance works much in the same way, paying your minimum monthly payment for a specific period of time following involuntary termination from your job.
Credit card property insurance is a bit different. This doesn't insure you as much as it insures the property you purchase with the card. If the things you buy are damaged by flood, fire or some other covered disaster, the credit card insurance will pay off those items.
Remember, nothing in life is guaranteed. Unless you pay your balances in full each month, you probably need credit card insurance. After all, it's better to be safe than sorry.